Gujarat Gas reduces PNG price for Morbi cluster, but ceramics prices to remain dearer

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(Express Photo) Make us preferred source on Google Whatsapp twitter Facebook Reddit PRINT Two weeks after the price of the Piped Natural Gas (PNG) proposed by the Gujarat Gas Ltd left the propane-run ceramic units in Morbi upset, the state government-run public sector unit has agreed to bring the price down. From Rs 88 per cubic metre which was offered on April 1, which would add up to Rs 93 per cm, GGL has brought the price down to Rs 77 per cubic metre following multiple negotiations. The price of PNG for the tile-makers, however, still is 48% higher than Propane-LPG (Rs 52 SCM) whose supplies ran out after the blockade of the Strait of Hormuz following the war in West Asia. It does however, bring the difference in prices between the regular users of PNG which were largely the sanitaryware units and those returning to PNG, which is the tile making units, to Rs 7 instead of Rs 23, bringing some semblance of parity to the sector. The decision by Gujarat Gas comes two days after the retail prices of the ceramic products were increased by the Morbi Ceramics Manufacturers Association (MCMA) on April 15 by 30% to 50%. In spite of these decreased rates of PNG, the prices of end products will remain unchanged, the association said. The shutdown at Morbi cluster, which accounts for 90% of the Indian ceramic industry, started on March 17 due the fuel shortage in India following the blockade of the Strait of Hormuz by Iran in light of devastating attacks by the US and Israel starting February 28. Almost all the fuel for the ceramic industry is imported, including all of the Propane-LPG and half of the natural gas. According to data from Gujarat Gas, as of February 2026 (pre-crisis), of the 792 ceramic units in Morbi, 377 had been using PNG supplied by it while the other 415 units had been using Propane-LPG supplied by Oil Marketing Companies IOCL, BPCL and HPCL. While the 110-odd sanitaryware units and smaller tiles units had been using PNG, all the other tile units had been relying on Propane-LPG to fire their kilns. Before the West Asia war began, consumption of Propane-LPG was an average of 55 lakh cubic metres per day, and consumption of Natural Gas was approximately 25 lakh cubic metres per day. After the supply of Propane-LPG to industry was throttled by lack of supplies from Qatar and other Gulf Cooperation Council (GCC) nations and remaining stocks were ordered priority redirection to residential cooking needs by the Government of India, the ceramic units, mostly the tiles units, were forced to turn to Gujarat Gas seeking PNG supplies. However, these units, which were paying Rs 52 per cubic metre for Propane-LPG before February 28, were asked by Gujarat Gas on April 1 to pay Rs 88 plus 6% GST (Rs 93), to get PNG since their usage for the previous six months was nil. This calculation was based on a GoI directive dated March 9. On the other hand, the 142-odd units, which had been regularly using PNG even before the conflict, were asked to pay Rs 66.00 plus 6% GST, which comes to Rs 70 per cubic metre. This fuel pricing differential between units in the same sector has disappointed most of the units. The MCMA representatives held a meeting with Gujarat Chief Minister Bhupendra Patel on March 10. They held talks with Central government officials at Commerce Bhavan in New Delhi on April 14 and finally with IAS Avantika Singh Aulakh, MD of Gujarat Gas, on April 16. Sandip Kundariya, president of the floor tiles division of the MCMA, said the association was hoping to get a rate of Rs 66 per cubic metre, which, after 6% GST, would bring them at par with the regular customers – Rs70 – but the demand was not accepted. But, these meetings did bear some fruit with the government also agreeing to the need of incentivising fuel for restarting ceramic production. On April 17, the MCMA got a revised rate for PNG at Rs 73 plus 6% GST, bringing the effective cost to companies at Rs 77.38 per cubic metre. 30-50% hike on ceramic products to remain The latest reduction in fuel costs for the ceramic units will have little impact on the retail prices of the ceramic products which were increased by the MCMA on April 15. Narendra Sanghat, president of the Wall Tiles Division of the MCMA, said Saturday, “We have decided on a hike in product rates across the industry ranging from 30% to 50% corresponding to the type of product and the rise in production costs associated with each of them. There is currently no plan to reduce these rates.” All ceramic units to open, conditions apply Gujarat Gas expected an increase in its customer base in Modbi cluster from 142 to 270 by May 1 with the 128 companies signing contracts with it recently. With the latest reduction of PNG price, more business owners are likely to reignite kilns using PNG and recall their migrant workers from northern and eastern states to resume their businesses. Sources said that if conditions remained largely stable, the entire ceramics cluster could be up and running by the end of May 2026. However, this outlook currently appears to be a bit optimistic considering that a day after Iran declared the Strait of Hormuz open for commercial ships following a ceasefire between Israel and Lebanon, the Islamic Republic again closed it on April 18, citing continuing US blockade of Iranian ports. In its communication to MCMA members on April 17, Gujarat Gas stated, “From April 16, 2026, to May 31, 2026, the price for customers who want to enter into MGO agreement will be USD23.500 per MMBtu (approximately Rs73/SCM at 8,350 kcal/SCM at the exchange rate of Rs93.750/USD). The Minimum Guaranteed Offtake (MGO) agreements will be for a minimum period of 1 month, till May 31, 2026.” In a relief to the industries, Gujarat Gas also agreed to change the billing days from the 10-day and 15-day options earlier to a 7-day option. This means that units will only have to give payment security (bank guarantee) only for 12 days at a time. Unit owners told The Indian Express that since the price of fuel had gone up from Rs 52 to Rs77, and an average major unit uses 10,000 cubic meters of PNG per day, the amount would be too huge for the owners to afford, leading to a rethink by the PSU. Gujarat Gas also asked owners to submit their prospective PNG demand for May to it by April 18 so it can calculate its own stocks for uninterrupted supply to the ceramics cluster, said sources in the PSU. Brendan Dabhi works with The Indian Express, focusing his comprehensive reporting primarily on Gujarat. He covers the region's most critical social, legal, and administrative sectors, notably specializing at the intersection of health, social justice, and disasters. Expertise Health and Public Policy: He has deep expertise in healthcare issues, including rare diseases, Antimicrobial Resistance (AMR), the complex logistics of organ transplants, and public health challenges like drug-resistant TB and heat health surveillance. His on-ground reporting during the COVID-19 pandemic and Mucormycosis was critical in exposing healthcare challenges faced by marginalized communities in Gujarat. Social Justice and Legal Administration: He reports on the functioning of the legal and police system, including the impact of judicial philosophy, forensics and crucial administrative reforms (. He covers major surveillance and crackdown exercises by the Gujarat police and security on the international border. Disaster and Crisis Management: His work closely tracks how government and civic bodies respond to large-scale crises, providing essential coverage on the human and administrative fallout of disasters including cyclones, floods, conflict, major fires and reported extensively on the AI 171 crash in Ahmedabad. Civic Infrastructure and Governance: Provides timely reports on critical civic failures,  including large scale infrastructure projects by the railways and civic bodies, as well as  the enforcement of municipal regulations and their impact on residents and heritage. ... Read More Stay updated with the latest - Click here to follow us on Instagram